Sunday, January 20, 2013

Steve Jobs Was Right

Apple CEO Steve Jobs often compared the transition from desktop/laptop PCs to tablets with the transition from trucks to cars. Just as trucks waned in popularity with the urbanization of America, Jobs theorized, so, too, would desktops and laptops with the advent of the tablet.

“When we were an agrarian nation, all cars were trucks, because that’s what you needed on the farm,” Jobs said at our D8 conference in 2010. “But as vehicles started to be used in the urban centers, cars got more popular. Innovations like automatic transmission and power steering and things that you didn’t care about in a truck as much started to become paramount in cars. … PCs are going to be like trucks. They’re still going to be around, they’re still going to have a lot of value, but they’re going to be used by one out of X people.”

At the time that remark was a bit contentious, but like many Jobs predictions, it would prove prescient a few years later. To wit, the latest PC shipment forecast from NPD DisplaySearch, which predicts that tablets will outship notebooks this year.

The research outfit reckons 207 million notebooks to be shipped in 2013. And it expects tablet shipments to rise 64 percent year over year to top out at 240 million.

And that’s just the beginning of a trend that will slowly see the notebook PC supplanted by the tablet. By 2017, NPD figures, tablets will have captured nearly 75 percent of the combined global tablet-laptop market, spurred on by new screen sizes that are fueling consumer interest in the device.

Indeed, according to NPD the seven-inch to eight-inch screen — like the ones in Google Nexus 7 and Apple’s new iPad mini, for example — is already so popular that it’s become the preferred tablet display size. In 2013, the research firm expects it to account for 45 percent of the market, surpassing the 9.7-inch size pioneered by the original iPad, which will account for about 17 percent.

“The 7.9 size is expected to be the screen size leader in share starting in 2013 because it appeals to supply and demand factors,” NPD DisplaySearch’s Richard Shim told AllThingsD. “From a supply perspective, it will be readily available meaning it shouldn’t face any technical issues to limit its production. And from a demand perspective, since it is used in the lower priced end of the iPad portfolio it will appeals to a wider segment of the mainstream market than the more expensive larger sized iPads.”

But the broader market numbers are what’s of real interest here. The consumer tablet market isn’t even three years old yet, but it’s already poised to surpass the market for laptops. And by such a significant amount — nearly 16 percent. Jobs said the day would come when only one out of every few people would need a traditional computer. Hard to believe it’s arriving so quickly.